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SCAMS BULLETIN Host Jay White is an inactive attorney in San Mateo County, California.

June 9, 2022

NON-FUNGIBLE TOKENS FRAUD

Courtesy Scambusters

Welcome to the world of non-fungible tokens (NFTs) fraud.

What is a non-fungible token?  It is a dark and mysterious place that’s riddled with scammers.

Avoiding being too technical, an NFT has been described as a unique piece of digital code that is linked to something else of potential value. That may be a work of art, actual or digital, or even a song.

If you buy an NFT using cryptocurrency your evidence of ownership will be stored in a digital ledger called a blockchain.

You can buy and sell NFTs on specialized websites, and, because each one is unique, your purchase can become valuable—but not always.

It’s important to know that when you buy an NFT, the digital code is usually all you own — not the item it’s linked to.

How to Avoid an NFT Scam

First, Do your research.

NFTs are clearly not for the fainthearted. There is risk. One piece of advice is to not enter this marketplace unless you understand what it is about.

Once you have enough knowledge and feel ready to dip a toe in the water, make only a small purchase.

Only trade on well-known, established NFT sales sites. The respected Motley Fool financial site has a Top 10 list here: https://tinyurl.com/Scambusters-NFT-markets

Beware of bargains.

 Some NFTs are offered for sale on multiple sites, sometimes at different prices. Check these multiple sites and, if you spot what appears to be a great bargain, it’s probably a scam.

Know your cybercurrency.

 Most NFTs are bought and sold using the cybercurrency Ethereum, priced in ETHs. Be sure you know the value of the currency when you buy or trade, and watch out for scam buyers and sellers who switch the currency to a lower-valued one mid-transaction.

Keep your personal, financial information to yourself.

 Fake sites will ask you to link your cybercurrency account so they can empty it. And never give out the 12-word security string that digital wallet companies give you to reactivate your account.

(Note: Scambusters does not offer financial advice. This information is provided for educational purposes only.)

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